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Via: a platform revolutionising transportation

Via's platform is shaking up on-demand transportation in urban markets

Via is a platform that promises to shake up the market for urban citizens requiring on-demand transportation.

A rider in a city that’s using Via would log into their app when they want to travel somewhere, and select where they would like to go and when they’d like to leave. Via’s app will tell the rider where they’re being picked up and when they need to be there. The rider then makes their way to that nearby location (it could be up to a few blocks away) and waits for their driver to pick them up. The ride will be shared with other passengers, who will be getting on and off throughout the journey, until the rider is dropped off near their final destination.

A driver for Via would drive a van, usually supplied by Via, and follow their app to find out the direction in which to go. They can see what their route is at any given time, but this changes in real time, depending on where other riders are requesting rides from and to. The driver stops to pick up riders at locations given to them by Via’s app. And they drop off riders when prompted by the app, too. The driver keeps this up until their shift for the day is finished.

The great innovation in Via’s platform is in the underlying algorithm it uses to provide its service to riders and drivers. The algorithm aggregates data from all the passengers looking for rides, and dynamically updates the routing of all its drivers to provide the optimal routes for riders as a collective to reach their destinations as quickly as possible. The algorithm also employs predictive analytics to send drivers on routes that are most likely to be desired by passengers that will soon request rides.

One interesting aspect of Via is that its platform is launched separately in different cities, in partnership with either the municipalities or local transportation companies. That way the service – both the algorithm and the user experience – can be adjusted to best match the requirements of each specific city. Even the user interface is branded to match the local transportation authorities, so users often don’t realize that they’re using Via’s platform.

From HBS Digital Initiative

And what’s interesting about launching the service as separate platforms in separate cities with separate teams, is that the platforms grow in different ways and excel along different dimensions. The benefit of this is that the platform is being tested out in many different calibrations, and best practices can then be shared between the different platforms and cities.

Via’s platform creates distinct value for each of its user groups. For riders, it primarily provides them with access to a large market of drivers. But it also gives them access to a large pool of other passengers going in similar directions, with whom they can share their costs. Many riders also value the opportunity to meet different people on their otherwise mundane travels, and feel good about the fact that their ride sharing reduces their carbon footprint.

For drivers, it provides access to a whole market of people that want to be transported around their city. And, in contrast to other on-demand transportation apps, it provides them with high utilization of their vehicles because they are being directed on routes that passengers want to be riding on.

And for cities, Via’s platform reduces congestion and by extension reduces carbon emissions. It also increases accessibility to transportation for residents who are not ordinarily near local transport routes. Finally it is an efficient deployment of a city’s resources. Whereas bus routes are typically constant throughout the day, Via will ensure that routes are only being served when passengers need them.

4 thoughts on “Via: a platform revolutionising transportation”

Thanks for sharing this interesting ride hailing company! I could definitely relate to the value creation you mentioned as someone whose daily commute relies on Uber/Lyft. I have two questions regarding Via’s product feature and scalability.

1) Product feature: I wonder what differentiation Via has in terms of the route matching algorithm compared to Uber Pool and Lyft Shared? As someone who used to be a Uber Pool driver, I would switch the Pool toggle on if I want to pick up multiple passengers to increase my utilization. Does Via have any unique features that are different from a Uber Pool driver?
2) Scalability: My understanding of on-demand ride hailing business is that this is a winner-takes-most if not all market featuring strong network effect. The more “liquid” (more riders and drivers online) a city is, the more likely riders and drivers get matched, and the better the user experience is. Whoever has large scale seems to have more edges to deliver such value proposition. In January 2019, Uber and Lyft took 97.4% of US market, leaving pretty tiny room for other companies to play.[1] I wonder what Via’s strategy is scale up in a market dominated by Uber and Lyft and how Via could continue delivering its customer promise.

Thank you very much for sharing this innovative platform! I agree with Li (as we saw in the Fasten case) that building awareness vis-a-vis Uber/Lyft and building a dedicated user base of riders and drivers will be the greatest challenge for Via moving forward. I wonder if the company can leverage its strengths in three aspects of its operations:
1) By emphasizing the reduced carbon footprint aspect, especially in cities where Uber/Lyft significantly contribute to traffic congestions and where the population is environmentally conscious (i.e., the major cities of the Northeast and the West Coast).
2) By leveraging its government partnerships. For example, in both Cambridge and Boston (because of schools being assigned by lottery rather than by geographic location) there is a significant portion of public school students who are transported by independent contractors operating vans; Via could provide a centralized alternative to these contractors.
3) Most importantly, by stressing the fact that Via provides the vehicles for operation. Greg Buchak from UChicago showed that the entry of Uber and Lyft into low-income zip codes significantly increases auto sales and auto loans in the area, as potential drivers race to acquire vehicles for operation on the platforms, which creates debt for those drivers. By having the company finance the cars, the drivers have much less risk.

Reference
[1] Buchak, Greg, “Financing the Gig Economy,” University of Chicago Booth School of Business and Department of Economics, December 2018.

Thanks Alex for an interesting article! My first reaction was similar to Li and Juan’s, as I wondered how Via could differentiate itself from Uber and Lyft. As a rider, I don’t think Via has any real brand differentiation yet, so I just add it to my list of potential on-demand transportation options when I’m in a city that offers Via (for example, if I’m in NYC, I check Uber Pool, Lyft Shared, and Via, and choose whichever option is cheapest). I would agree with Juan though that a big differentiator between Via and the other options is its government partnerships. Uber has notoriously made government officials and regulators upset by entering markets without partnering with them. By leveraging government partnerships, it opens up additional revenue streams outside of riders simply paying for rides (for example, a partnership with the LA Metro was funded by a $1.35m grant from the Federal Transit Administration).[1]

Another potential revenue stream, as Juan hinted at indirectly, is school transportation systems themselves. For example, the Harvard Evening Van Service (which provides free rides in Cambridge between 7pm-3am)[2] is now powered by Via.[3] However, as a regular user of the Harvard Evening Van Service, I have to say that I find the quality of the service lower than I did before it started using Via’s technology, as it is no longer a door-to-door service and wait times are longer.

Thanks for writing this interesting article on Via. A few thoughts about the business model and value proposition.

Scalability: I echo Li’s point on scalability for a slightly different reason. Via differentiates itself almost as a larger version of Uber pool, with the goal of filling vans/minivans with passengers travelling the same route. Cities such as New York City are perfect markets for Via because of large population densities, dense road networks, abundant walkways, all of which make it easier to match passengers travelling similar routes. This, however, is a very rare combination. In fact, most cities in the US but for a few do not have these attributes. As a result, Via would have a hard time expanding into new cities and still manage to fill minivans. If occupancy is low, the large vehicles Via operates would become a significant disadvantage. If Via uses smaller vehicles, it would lose its differentiation from Uber and Lyft.